Estonia is implementing stricter policies to regulate crypto activities propagating from and within its region. In recent days, the government of Estonia revoked the operational permits of 398 service providers of virtual assets. The move comes almost a year after the northern European nation amended its anti-money laundering laws to ensure that cryptocurrencies and similar digital assets are not misused to wire illegal money around, right from under the government’s nose.
The Financial Intelligence Unit (FIU) of Estonia analysed and decided which crypto firms would be barred from offering their services there. After this trim, currently around 100 crypto firms have managed to retain their work permits in Estonia, Bitcoin.com said in a report.
For now, the names of the companies that lost their licences in Estonia remain undisclosed.
The FIU accessed the companies around the status of their compliance with the legal requirements that Estonia has laid out for the companies of this sector. The regulators allowed firms that submitted correct documents, kept the manner of operation in alignment with the law, and had policies in place to mitigate any risks involved retain their licences.
“In the applications, we found very many suspicious circumstances on various topics. This calls into question the credibility of the companies that wanted to do business here – their actual desire to provide services in Estonia or, vice versa, shows the desire of certain persons to use the Estonian economic and financial system for illegal activities,” Matis Mäeker, the Director of Estonia’s FIU said in a blog post.
In 2017, Estonia began issuing crypto licenses in a loosely regulated ecosystem. This caused several crypto companies to flock to the country in order to establish their businesses in pro-crypto Estonia.
Between 2017 and 2022 however, the government of Estonia realised that some notorious businesses were taking advantage of the largely untied rulebook and selfishly minting money while not contributing to the economy of the country.
This was the trigger that led the Estonian government to amend its laws to monitor the businesses concerned with virtual digital assets in 2022.
Following the amendment of the anti-money laundering laws in Estonia, over 200 crypto firms voluntarily cancelled their business licences in Estonia.
“We will continue reviewing the applications for amendment of authorisations, but soon, we can return to normality in terms of supervision, where we will be moving largely from assessment on paper to daily on-site supervision,” Mäeker noted.
Research platform Triple-a estimates that over 32,000 citizens of Estonia currently hold cryptocurrencies.